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SCG Legal Newsletter
February 2018

 

Legal Industry Employment Declines in January

Despite an upbeat employment report for the overall U.S. economy in the first month of 2018, legal industry employment declined by 1,100 jobs in January, according to preliminary data released February 2nd by the U.S. Department of Labor. The agency’s Bureau of Labor Statistics showed a decline in the number of people employed in legal services in January over the prior month. The monthly BLS data release reported that 1,135,500 people worked in the industry in January, which includes lawyers, paralegals and legal secretaries, among other law-related professions, which is down from 1,136,600 in December. The BLS release follows on the heels of a recent National Association for Law Placement report, showing that summer associate class sizes also declined at firms with more than 700 lawyers for the first time since 2012.


Law Firm Revenue, Profits Up in 2017

After stalling in the third quarter, law firm financial performance finished 2017 on a positive note, with a larger segment of the legal market contributing to upward trends in revenue and profits than in recent years, according to a new report from Wells Fargo & Co. Wells Fargo Private Bank’s Legal Specialty Group on January 30th released the results of its year-end check-in on law firm financials, showing average increases in revenue and profits between 3% and 4% for the legal market overall. Drawn from a survey of 160 firms, the report also showed an increase in demand across the law firms participating in the survey. However, despite positive financial markers overall, Wells Fargo also reported stratification across different segments of the legal industry. The largest and most profitable firms generally outperformed their smaller counterparts with respect to revenue and demand. Firms in the Am Law 50 reported revenue growth of 6.8% in 2017, while the Am Law 100 as a whole reported a 5.3% increase in revenue. Firms in the Am Law Second Hundred saw a smaller revenue uptick of 2.3% in 2017.


Many Companies Remain Unprepared for GDPR

The General Data Protection Regulation will go into effect on May 25th for any company doing business in the EU. Yet EY’s third biennial Global Forensic Data Analytics Survey has found only one-third of companies currently have a GDPR compliance plan in place. Others were studying it, had heard of it but had not taken action or had never heard of GDPR. GDPR broadens the definition of “personal data,” requires that organizations receive explicit consent before processing users’ data and includes “the right to be forgotten,” among other major legal changes. Predictably, respondents in Europe were the most likely to have a plan to comply with GDRP legislation, with 66% saying they had one in place. Africa and the Middle East came in second, with 27% responding they had a plan. In the Americas and Asia Pacific region, 13% and 12%, respectively, reported having plans.


Law One of Best Paid Sectors in UK

Thirty percent of lawyers earn over £100,000 in the UK, making it one of most highly paid sectors in the UK. It takes 11 years on average for lawyers to reach this salary. The legal sector is exceeded only by financial services, which has 60% earning £100,000 after 12 years in the business. Insurance is on the same level as lawyers with 30% earning more than £100,000 but only after 14 years in the business. The research, released by salary comparison website Emolument, reports that 26% of consultants, energy and mining and pharmaceuticals experts reach this salary after 15 years in the job.  Emolument analyzed 57,000 UK salaries to compare remuneration patterns across various industries. Charity, nonprofit and public sector professionals were at the bottom of the list, with only 5% earning more than £100,000 and taking an average of 17 years to reach this salary. 


Compliance, Regulation Top 2018 In-House Priorities

New data from legal staffing and consulting firm Robert Half Legal indicates that compliance and regulation are the most common in-house priorities for 2018. The data, which are based on 175 telephone interviews with lawyers from companies with at least 1,000 employees in the United States and Canada, found that 41% of respondents were most focused on compliance and regulation. Mergers and acquisitions was the second most common concern for in-house respondents, with 14% citing M&A as their top priority this year. Close behind M&A was risk and crisis management, the top focus for 13%, and data privacy and security, which came in at 12%. Nearly one in 10 respondents listed “something else,” “don’t know” or “can’t choose just one” for their top 2018 priority.


Global In-House Counsel Favor Smaller Firms, Citing Lower Cost, Better Service

In-house teams at large global companies are three times more dissatisfied with larger law firms than small but innovative ones, according to a new survey from the Lawyer Research Service and business matching service Globality. “Global Trends in Hiring Outside Counsel,” a recently released survey of more than 300 general counsel and senior in-house lawyers at international companies generating more than $1 billion in annual revenue, found respondents were dissatisfied with larger law firms 19% of the time. For smaller firms, the dissatisfaction rate was only 6%. According to the survey, companies that prefer using smaller firms primarily do so because they believe they’re more innovative and provide better customer service. Price is also a factor, with more than half of respondents citing “high costs” as their top gripe with big law firms. Despite the higher rates of dissatisfaction, many in-house counsel still choose familiar firms rather than smaller, less well-known alternatives, according to the survey. However, the majority said that if there were technology that could link them to smaller legal providers they’d be more inclined to use them.

 

 

 

 

 

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